ALEXANDER et al v. SVC MANUFACTURING, INC. et al

Filing 29

ENTRY ON MOTION TO REMAND - Plaintiffs' Motion to Remand to State Court (Dkt. 17 ) is DENIED. Signed by Judge Tanya Walton Pratt on 9/17/2013. (JD)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF INDIANA
INDIANAPOLIS DIVISION
SHA’RON ALEXANDER, MICAH BRADLEY,
ROBERT BENTLEY, ERIC BUTLER,
ALPACINO CARSON, FLORAJEAN CLARK,
WESLEY COBB, CHESTER COMBS,
CAROL DARDEN, REONTHA DAVISON,
TERRY ELLIOT, ARAMANDO ESCORCIA,
GINO GRAZIANO, BRENDA HAMILTON,
TAVARES HARNEY, HOWARD HARRIS,
KIMBERLY HUNT, TIMMY JOHNSON,
TRINA JOHNSON, CHRISTOPHER JONES,
DARRYL JORDAN, GEORGE LEWIS,
ANTHONY LIGGINS, LYNELL LOVE,
KENNETH MAYES, BRANDON MOWERY,
MELNA ROGERS, SEAN ROLLINS,
KIMBERLY SHOLAR, SYLVIA SMITH,
ALBERT TATE, PAM TURNER,
LASHAWN VAUGHN, GINGER WOODS, and
VANESSA WRIGHT,

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Plaintiffs
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SVC MANUFACTURING, INC., and
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STOKELY VAN-CAMP, INC., doing business as )
PEPSICO,
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Defendant.
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Case No. 1:12-cv-01636-TWP-TAB

ENTRY ON MOTION TO REMAND
This matter is before the Court on the Motion filed by Sha’ron Alexander and the abovenamed individuals (collectively, “the Plaintiffs”) to remand this case to the Marion Superior
Court (Dkt. 17).

The lawsuit arises out of a wage dispute between the Plaintiffs, SVC

Manufacturing, Inc. and Stokely Van-Camp, Inc. (collectively, “the Defendants”).
reasons set forth below, the Plaintiffs’ Motion to Remand (Dkt 17) is DENIED.

For the

I. BACKGROUND
SVC Manufacturing, Inc. (“SVC”) is a wholly owned subsidiary of Stokely Van-Camp,
Inc. (“Stokely”). Both are corporations with their principal offices located in Chicago, Illinois.
SVC and Stokely allegedly do business under the name of PepsiCo,1 which has a manufacturing
facility located at 5858 Decatur Boulevard in Indianapolis, Indiana.
On June 7, 2010, SVC and United Steel, Paper and Forestry, Rubber, Manufacturing,
Energy, Allied Industrial and Service Workers International Union (“the Union”), on behalf of
Local Union No. 1999, executed a collective bargaining agreement (“the CBA”). The CBA took
effect that day and was to remain in effect until midnight on June 2, 2013. The CBA contained
various provisions regarding compensation, including a section devoted to how vacation pay
would be earned and redeemed.
The Plaintiffs are former employees of the Defendants who worked at the PepsiCo
manufacturing facility in Indianapolis. Their employment was terminated in 2012. Plaintiffs
allege that prior to their terminations, they had accrued unused vacation time, and the Defendants
did not pay the Plaintiffs for this time after terminating their employment. On August 22, 2012,
the Plaintiffs sent a letter to the Defendants demanding payment, but the Defendants continue to
fail and refuse to pay Plaintiffs their vacation pay. On October 1, 2012, the Indiana Attorney
General authorized the Plaintiffs to pursue their wage claims under Indiana law.
On October 11, 2012, the Plaintiffs filed their Complaint in state court, alleging that their
unused vacation pay was wrongfully withheld from them under the Indiana Wage Claims
Statute, Ind. Code § 22-2-9-1 et seq. The Plaintiffs sought to recover their unpaid vacation time

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The Defendants claim that Stokely does not do business as PepsiCo, but the Court accepts, without deciding, that is
does for the purposes of this Entry.

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and the penalties allegedly permitted under Ind. Code § 22-2-5-2. On November 8, 2012, the
Defendants filed a Notice of Removal in this Court.
II. LEGAL STANDARD
Under federal law, a defendant may remove a case to federal court if federal subjectmatter jurisdiction exists. 28 U.S.C. §§ 1331; 1441(a). If a federal court lacks subject-matter
jurisdiction to hear the case, it must be remanded back to state court. 28 U.S.C. § 1447(c). “The
party seeking removal has the burden of establishing federal jurisdiction, and federal courts
should interpret the removal statute narrowly, resolving any doubt in favor of the plaintiff's
choice of forum in state court.” Schur v. L.A. Weight Loss Ctrs., Inc., 577 F.3d 752, 758 (7th
Cir. 2009) (citing Doe v. Allied-Signal, Inc., 985 F.2d 908, 911 (7th Cir. 1993)).
III. DISCUSSION
With these exacting standards in mind, the Court must now determine whether remand is
warranted. Plaintiffs ask this Court to remand this case to state court because they only filed a
“garden-variety” state wage claim.

The Defendants contend that federal law completely

preempts Plaintiffs’ state wage claim and creates federal-question subject-matter jurisdiction for
the purposes of removal. As a preliminary matter, neither party challenges the validity of the
CBA, so the Court assumes, without deciding, that it is valid for the purposes of this motion.
Section 301 of the Labor Management Relations Act, 29 U.S.C. § 185 (“§ 301”), is one
of only a few statutes that “completely preempt” state law. Smith v. Colgate-Palmolive Co., 943
F.2d 764, 786 (7th Cir. 1991). Plaintiffs are the “master of the claim” and may avoid federal
jurisdiction under the “well-pleaded complaint rule” by relying exclusively on state law.
Caterpillar Inc. v. Williams, 482 U.S. 386, 392 (1987). However, there is an “independent
corollary” to this under the doctrine of complete preemption. Id. at 393. When Congress passes

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a statute with “extraordinary” pre-emptive force, any complaint filed under a state cause of
action that is also covered by the federal statute “necessarily ‘arises under’ federal law.” Id.
(quoting Franchise Tax Bd. v. Constr. Laborers Vacation Trust for S. Cal., 463 U.S. 1, 24
(1983)) (citing Metro. Life Ins. Co. v. Taylor, 481 U.S. 58, 65 (1987)). This doctrine is usually
applied to claims preempted by § 301. Caterpillar, 482 U.S. at 393-94. In order for complete
preemption to apply under § 301, the claim brought by the Plaintiffs must be “founded directly
on rights created by collective-bargaining agreements, and also claims ‘substantially dependent
on analysis of a collective-bargaining agreement.’” Id. at 394 (citing Elec. Workers v. Hechler,
481 U.S. 851, 859 n.3 (1987); Allis-Chalmers Corp. v. Lueck, 471 U.S. 202, 220 (1985)).
This matter turns on whether the Plaintiffs could only vindicate their claims after
interpreting the provisions of the CBA. To determine whether § 301 completely preempts state
law in a particular case, the Court looks to “whether the resolution of the claim depends on the
meaning of, or requires the interpretation of, a collective bargaining agreement.” Loewan Grp.
Int’l, Inc. v. Haberichter, 65 F.3d 1417, 1421 (7th Cir. 1995) (citing Lingle v. Norge Div. of
Magic Chef, Inc., 486 U.S. 399, 403 (1988)). For complete preemption to apply, there must be
more than a tangential overlap between the Plaintiffs’ ostensibly state claim and the CBA; the
overlap must be such that the claim “cannot be adjudicated without interpretation of the
collective bargaining agreement, [in which case] the claim turns into a federal claim that the
agreement itself has been violated.” Brazinski v. Amoco Petrol. Additives Co., 6 F.3d 1176, 1180
(7th Cir. 1993); see also Loewan, 65 F.3d at 1422. In Loewan, the court looked to the elements
of the state claim to determine what role the CBA would play in adjudicating the claim, so this
Court does the same. Loewan, 65 F.3d at 1422.

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On this point, the Indiana Court of Appeals has recognized that a common law right to
vested vacation time exists, but the CBA potentially displaced that right. Under Indiana law,
“[a]n agreement to give vacation pay to employees made before they perform their service, and
based upon the length of service and time worked is not a gratuity but rather is in the form of
compensation for services.” Die & Mold v. Western, 448 N.E.2d 44, 46 (Ind. Ct. App. 1983).
“And when the services are rendered, the right to receive the promised compensation is vested,
as much as the right to receive wages or other forms of compensation.” Id. at 46-47. The
Indiana Court of Appeals has interpreted “vested” to mean that persons and legislatures have no
power to change a primary right guaranteed by the contract. Baesler’s Super-Valu v. Ind.
Comm’r of Labor ex rel. Bender, 500 N.E.2d 243, 246 (Ind. Ct. App. 1986) (citing 3A Corbin on
Contracts, Ch. 39 § 742 at 453 (1960)). The Baesler’s court determined that the contract
between the parties did not displace the Die & Mold right to vested vacation pay, so the plaintiff
was entitled to a pro rata share of a year’s worth of vacation pay. Baesler’s, 500 N.E.2d at 246
n.1. In the present case, the CBA contained such a provision to displace the Die & Mold right.
Specifically, the CBA prohibited prorated vacation pay with exceptions for retirement
and death, both of which occur after an employee parts ways with the company. Section 12.11
of the CBA states “Vacation pay will not be prorated except in the case of retirement or in the death
of an employee. An employee either qualifies for full vacation or has failed to qualify for vacation.”

Dkt. 18 at 3. The Plaintiffs contend that the CBA only contemplates the calculation of pay for
present employees and that if the parties had desired a provision for terminated employees, then
they could have included one. Dkt. 18 at 5. On the contrary, it is not clear that this provision
does not cover terminated employees. The provision only excludes two conditions that can only
occur after a separation from the company; it is a matter of contract interpretation whether “an
employee” under this provision includes both present and terminated employees. If it does, this
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provision displaces the Die & Mold rights for both. Furthermore, vacation pay can only be
“vested” after being guaranteed by a contract; thus, even under Die & Mold, the Plaintiffs’ claim
to vacation pay depends on the CBA.
The Defendants correctly point out that the Plaintiffs undermined their claim by using
contract interpretation to assert that the CBA did not cover terminated employees. The Seventh
Circuit has found that declaring that the terms of a CBA are “unequivocal” is itself an
interpretation of the contract. Nat’l Metalcrafter, Div. of Keystone Consol. Indus. v. McNeil, 784
F.2d 817, 823 (7th Cir. 1986). In National Metalcrafter, the Seventh Circuit addressed the
intersection of a CBA and the Illinois Wage Payment and Collection Act. The plaintiff, much
like the Plaintiffs in this case, “plugged the gap” in the CBA by asserting that “no reasonable
person” could have interpreted the contract to extend to the current dispute. Id. at 824. The court
acknowledged that the plaintiff’s interpretation of the contract may have been correct, but it
ultimately decided that this was only one possible gap-filling interpretation of the agreement. Id.
In this case, Defendants are correct that the Plaintiffs’ interpretation of the CBA is just that, an
interpretation. As stated previously, more than one possible interpretation of the CBA exists, so
interpretation of the CBA would be necessary to resolve the Plaintiffs’ claim.
Federal law completely preempts the Indiana Wage Claims Statute in this case. When
the resolution of a state law claim requires interpreting a CBA, “the application of state law is
preempted and federal labor law principles must be employed to resolve the dispute.” Atchley v.
Heritage Cable Vision Assocs., 101 F.3d 495, 499 (7th Cir. 1996).

Assuming terminated

employees are included in § 12.11, the Plaintiffs’ rights, as alleged in their Complaint, can only
be adjudicated by interpreting the CBA because that section affects the amount of vacation pay

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they could receive. As such, the Plaintiffs’ claims are completely preempted by § 301, federalquestion subject-matter jurisdiction exists, and the case was properly removed to federal court.
IV. CONCLUSION
For the foregoing reasons, the Plaintiffs’ Motion to Remand to State Court (Dkt. 17) is
DENIED.
SO ORDERED.
09/17/2013
Date: _____________

________________________
Hon. Tanya Walton Pratt, Judge
United States District Court
Southern District of Indiana

DISTRIBUTION:
Heather L. Wilson
FROST BROWN TODD LLC
[e-mail]
David F. Hurley
HURLEY & HURLEY PC
[e-mail]
Daniel LaPointe Kent
LAPOINTE LAW FIRM P.C.
[e-mail]
Mary Jane Lapointe
LAPOINTE LAW FIRM PC
[e-mail]
Marla Elizabeth Muse
LAW OFFICE OF MARLA E. MUSE LLC
[e-mail]
Cara J. Ottenweller
VEDDER PRICE P.C.
[e-mail]
Thomas M. Wilde
VEDDER PRICE, P.C.
[e-mail]

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